Kizad: attracting FDI

Kizad: attracting FDI

Kizad drives diversification

The free zone is quickly becoming a focal point for the industrial diversification of the UAE, with companies from sectors including chemicals, automotive, logistics and packaging setting up in the zone

September 1, 2018

Khalifa Industrial Zone Abu Dhabi (Kizad), which currently has 200 companies operating, has garnered investments of $17.5 billion so far and is projected to contribute around 15 per cent to Abu Dhabi’s non-oil gross domestic product (GDP) by 2030, a senior executive said.

“Kizad is among the cornerstones for Abu Dhabi Economic Vision 2030 and is expected to contribute around 15 per cent of Abu Dhabi’s non-oil gross domestic product (GDP) by that year,” Edwin Lammers, vice president of commercial at Kizad, told Gulf Industry in an e-mail interview.

A subsidiary of Abu Dhabi Ports, which is attracting keen interest from a range of non-oil industry sectors and companies that have chosen to invest in Abu Dhabi expects to grow further with new facilities being created such as warehouses and Light Industrial Units (LIUs), he said.

“It is also part of the drive to create the range and number of opportunities necessary to recruit, retain and develop local and skilled expatriate talent to build a sustainable knowledge economy while reducing reliance on unskilled labour,” he added.

“Kizad is quickly becoming a focal point for the industrial diversification of the UAE, with companies from sectors including chemicals, automotive, logistics, packaging and food and beverage setting up in the Zone,” said Lammers. 

Lammers: new vision

Lammers: new vision

Following Kizad’s announcement in March 2017 to expand by 100 sq km to become the largest free zone in the UAE, it now encompasses 410 sq km, 200 tenants and over $17.5 billion in total investment, he added.

Some of the major companies operating in the zone include Jiangsu Provincial Overseas Cooperation and Investment Company Limited (JOCIC), Mediterranean Shipping Company (MSC), Emirates Global Aluminium (EGA), Cosco Shipping, Shaheen Chem, Brasil Foods, Agility Logistics, Al-Futtaim Logistics, among others.

Foreign direct investment (FDI) from Chinese companies in Abu Dhabi’s industrial free zone has dominated with as many as 19 Chinese companies having signed agreements to invest over $1 billion in Khalifa Port Free Trade Zone (KPFTZ) under the China-UAE Industrial Capacity Cooperation (Jiangsu) Construction Management Co, a UAE company established by JOCIC.  KPFTZ, located adjacent to Khalifa Port, is a new free trade zone within Kizad which was launched last year in response to the rising demand from both foreign direct and existing investors.

To draw more investors from the world’s second biggest economy, Chinese nationals have been recruited to respond to, initiate and enable investment towards the establishment of manufacturing facilities in Kizad, Lammers said.

Likewise, to attract further Indian investment, business development representatives have been appointed to facilitate FDI inflows into Kizad.

Responding to the needs of distributors, manufacturers, shippers and logistics companies, Kizad has further expanded its product offerings with the launch of new free zone warehouses and Light Industrial Units (LIUs). Located within Kizad Logistics City, and adjacent to Khalifa Port, the new free zone warehouses will cater to trading and export companies, Third Party Logistics, freight forwarders and distributors while the pre-built and flexible LIUs will serve various light manufacturing businesses and workshops. Due to be completed in October, the modular units are available for pre-booking, he said.

Kizad has also identified the need for a centralised hub to service the critical construction industry. Solutions offering include open land at competitive rates, or bonded storage for materials imported in bulk and not-yet-required on site are available. 

One of the industrial plants in Kizad

One of the industrial plants in Kizad

Additionally, international business councils have been engaged to attract growing trade, logistics and manufacturing sectors. Commercial schemes for target markets in local industries, Saudi Arabia, China, India and Japan have been established. Furthermore, MoUs were signed with the Confederation of Indian Industries (CII) and China Council for the Promotion of International Trade recently.

Among the major infrastructure projects completed at Kizad recently is KPFTZ, which increased Kizad’s total free zone space to over 100 million sq m. Advantages to investors include 100 per cent foreign ownership, 100 per cent repatriation of capital and profits.

Within Kizad Area A, 13.7 km of roads and utilities have been upgraded to further support and accommodate a range of investors including heavy industrial, general industrial, port and logistics clients. To create an integrated economic city, 84 sq km of free zone expansion was given for Kizad Area B. It will accommodate commercial, industrial, warehousing, storage, residential workforce accommodation and community facilities.

Kizad’s recently launched Food Processing cluster supports Abu Dhabi’s Economic Vision 2030 by increasing food production within the emirate through reducing dependence on imports.  Some of its most important clusters include: aluminium; food processing and packaging; trade and logistics; engineered metal products; and mixed use for general industries such as pharmaceutical, polymer converting, and oil field services.

The growth of these industrial clusters is also dependent on the strategically and adjacently located Khalifa Port; one of the world’s most advanced deep-sea ports and the region’s first semi-automated port.

“The integrated services of Khalifa Port and Kizad offer long-term competitive commercial advantages including supply chain efficiencies. Having Khalifa Port at one’s doorstep enables the convenient domestic and international shipment of products and raw materials to and from Abu Dhabi to anywhere in the world,” said Lammers.

For example, one of the world’s largest container operators, Cosco Shipping Ports Limited (CSPL) has made Khalifa Port their main hub in the region by operating a new container terminal to drive higher volumes, lower freight costs and stimulate more volume. Another significant venture that will bring strategic logistics, trade and shipping benefits to the region is a milestone agreement between Abu Dhabi Ports and Swiss-based Mediterranean Shipping Company (MSC). MSC has made Khalifa Port its Arabian Gulf regional container hub - this move will see the capacity of Khalifa Port expanded while access to vast number of regional and global markets will be enhanced and new FDI will be achieved.

One of the crucial factors driving growth at the industrial hub is its location. Strategically located between the cities of Abu Dhabi and Dubai, Kizad offers businesses easy access to markets through sea, air, road and future rail offering multi-connectivity to more than 4.5 billion consumers.

In addition, Kizad’s proximity to four international airports make it fully-equipped to manage air cargo, an alternate transportation solution for shipments.

Crucial to its overall success is also the tailored solutions it offers: Kizad offers investors the freedom to choose their own tailored ownership approach that suits their business needs. Businesses have the option to set up a local company or sole proprietorship with land at Kizad specifically planned and designed to be flexible.

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